How many times did the merchandise inventory turn over during 19B?

Question

The BB Company's merchandise inventories and other related accounts for 19B follow:

Sales ----------------------------------- 3,000,000
Cost of goods sold ----------------- 2,200,000
Merchandise Inventory:
Beginning of year --------------- 500,000
End of year ----------------------- 600,000

Assuming that the merchandise inventory buildup was relatively constant.

Answer 1

Inventory turnover = COGS divided by average inventory
Ave inventory = (500k + 600k)/2 = 550k
Inventory t/o = 2,200,000/550,000 = 4.0
Merchandise inventory turned over 4 times during 19B.